P1T GDP value seen in ‘blue economy’

THE incoming chief of the National Economic Development Authority (NEDA) sees potential in the country’s “untapped” marine wealth or so-called blue economy, which could easily reach P1 trillion in GDP value, according to a study by the University of the Philippines’ Marine Science Institute.

“The area covering our blue economy comprises—just the area—70 percent. The sea is a huge thing, but in terms of the wealth, it’s not 70 percent marine wealth versus 30 percent land based. It’s just that the marine wealth is contained in a bigger territory,” Ernesto Pernia, the incoming socioeconomic planning secretary and NEDA director-general said.

“[The P1 trillion blue economy GDP value] is a very conservative estimate because it not only includes the part of our marine resources tapped, but there’s so much untapped marine wealth that we should be including in our economy,” he added.

The “blue economy” covers bio-diverse marine resources and wealth such as fisheries, corals, as well as tourism, Pernia said.

The soon-to-be NEDA head said engagement in the blue economy would strengthen Philippine claims in the sea-based territorial disputes with China.

“If we are aware of this, if people have been aware of this—our possession in terms of the blue economy, a lot of which is in the area—we would have stronger hold on our disputed islands claimed by China,” Pernia said.

“[China’s claim] is really a lame claim, like squatters. When they stay in that place for too long enough, then they become owners of it. In the case of the blue economy, we have claimed it as our own—not as squatters but legitimately, legally, and internationally defined as our own. Then it will be easier for us to protect it,” he added.

Tracking inclusive growth
Pernia said during the Makati Business Club meeting on Thursday that aside from the quarterly and annual gross domestic product (GDP) data, he is pushing to form a new metric in the Philippine Statistics Authority (PSA) that will measure the trickling down of GDP growth across income groups.

“People are saying that the high economic growth is not trickling down, so we need to see that in terms of metrics. How much of the economic growth is going to the lower income groups,” Pernia said.

“We’re going to have, if possible, to do it every quarter for income classes. But certainly every year, or every semester, we will have that statistic.”

Pernia said there is also a need to come up with a metric data looking at how economic growth is distributed across regions, but the existing GDP accounts of the PSA has already existing regional GDP growth figures.

He said the GDP growth to income groups data will still be developed, but likely to emerge from the “merging the National Accounts with the Family Income and Expenditure Survey.”

Asked if there were preliminary plans and timetable for the roll out the PSA data, Pernia said he would have to visit the PSA office first.

Pernia and the whole of the Duterte administration will assume office on June 30.

Through these data, the government may track their progress in their goal to bring down poverty incidence to 16 percent by the end of Duterte administration in 2022—or more than 1 percentage point per year—from 25 percent as of 2015.

In order to achieve this, the incoming NEDA head said the administration sees family planning as the key to lower poverty in the poorer classes of the country.

“So what we’ll be able to achieve is to bring down poverty incidence by 1.25 to 1.5 percentage point a year and that will bring down the poverty incidence of 25 percent to 16 percent by the end of the Duterte administration in 2022,” Pernia said.

“Dropping it by 1 percent per annum is already going to be substantial because between 2006 to 2012, the drop in poverty was only a little over 1 percent percentage point,” he said.

“If we make it easy for poor families, who are having more children, [to]want easy access to contraceptives or family planning, then they would be able to reduce their pregnancy rates, illiteracy rates. So that would even be by itself contributing to poverty reduction,” he added.

In terms of GDP growth, state-run agency Development Budget Coordination Committee (DBCC) has revised its GDP growth target to a “conservative” 6.5 percent this year, lower than the previous 6.8-percent target.

The Philippine economy grew by 6.9 percent in the first quarter of 2016, and 5.8 percent in 2015.